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Quarterly Financial Report For the Quarter ended September 30, 2015

Statement outlining results, risks and significant changes in operations, personnel and program

A. Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act, and in the form and manner prescribed by the Treasury Board. It has not been subject to an external audit or review. This quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates.

The Office of the Director of Public Prosecutions (ODPP) is an independent prosecution service mandated to prosecute criminal and regulatory offences under federal jurisdiction. The ODPP plays an integral role in the criminal justice system, promoting due process and working to safeguard the rights of all those who come into contact with the justice system.

The benefits to Canadians from the work carried out by the ODPP include:

provision of timely and independent advice to federal investigative agencies and government departments on the criminal law implications of investigations and prosecutions;

principled and independent decisions by prosecutors; and

confidence in the administration of justice through professionally conducted prosecutions that result in judicial determinations on the merits of the evidence.

On October 1, 2014, by virtue of the coming into force of amendments to the Canada Elections Act, the Office of the Commissioner of Canada Elections (OCCE) was formally transferred from Elections Canada to the ODPP. The Commissioner and the Director exercise their respective statutory duties independently from each other, even while operating within the same organization.

The ODPP has two strategic outcomes and four program activities in addition to internal services:

Strategic Outcome 1: Criminal and regulatory offences under federal law are prosecuted in an independent, impartial and fair manner.

Drug, Criminal Code and terrorism prosecution program: This program supports the protection of Canadian society against crime through the provision of legal advice and litigation support during police investigations, and the prosecution of: all drug offences under the Controlled Drugs and Substances Act and any related organized crime and proceeds of crime offences throughout Canada, except in Québec and New Brunswick, where the ODPP prosecutes such offences only where charges are laid by the Royal Canadian Mounted Police; pursuant to understandings with the provinces, Criminal Code offences where they are related to drug charges; all Criminal Code offences in the three territories; terrorism and national security offences; and war crimes and crimes against humanity offences. This program activity also involves the promotion of federal/provincial/territorial cooperation on criminal justice issues of mutual concern.

Regulatory offences and economic crime prosecution program: This program supports the protection of Canadian society against crime through the provision of legal advice and litigation support to police and federal investigative agencies, and the prosecution of: offences under federal statutes aimed at protecting the environment and natural resources as well as the country’s economic and social health (e.g., Fisheries Act, Income Tax Act, Copyright Act, Canada Elections Act, Canadian Environmental Protection Act 1999, Competition Act, Customs Act, Excise Act, and the Excise Tax Act); offences involving fraud against the federal government; capital market fraud offences; and any conspiracies and attempts to violate any of these statutes. This program also includes the recovery of outstanding federal fines and the promotion of federal/provincial/territorial cooperation on criminal justice issues of mutual concern.

Strategic Outcome 2: Compliance and enforcement activities under the Canada Elections Act and Referendum Act are conducted by the Commissioner of Canada Elections in an independent, impartial and fair manner.

Compliance: This program supports the use of non-punitive and informal corrective measures in response to certain situations of non-compliance and of formal measures for others, such as the conclusion of compliance agreements with offenders, the seeking of injunctions during election periods, and the making of applications for the judicial deregistration of a registered party.

Enforcement: This program supports taking enforcement measures to respond to situations of non-compliance, including deciding which matters will be referred to the ODPP for possible prosecution and what charges will be recommended.

Internal services: Internal services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization.

B. Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the ODPP's spending authorities granted by Parliament, and those used by the ODPP consistent with the Main Estimates and Supplementary Estimates. This quarterly report has been prepared using a financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before moneys can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The ODPP uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

C. Highlights of Fiscal Quarter and Fiscal Year-to-date Results

1. Spending Authorities

At the end of the second quarter of 2015-16, the ODPP had a total funding of $187,371 thousand available for use as detailed in Table 1 and Appendix A. This amount is composed principally of the 2015-16 Estimates and the operating budget carry forward from the last fiscal year. The increase of $13,099 thousand (or 8%) compared to total spending authorities at the same time in fiscal year 2014-15 is mainly due to the new funding for the collection of federal fines and the transfer of the Commissioner of Canada Elections to the ODPP.

Table 1. Year-to-date Authorities by Strategic Outcomes and Internal Services at the end of September 30, 2015 (in thousands of dollars)

Strategic Outcome and Internal Services

Program Expenditures
(Vote 1)

Statutory Authorities

Total

Total Spending Authorities

165,951

21,420

187,371

Strategic Outcome 1 Criminal and regulatory offences under federal law are prosecuted in an independent, impartial and fair manner

146,155

16,173

162,328

Strategic Outcome 2 Compliance and enforcement activities under the Canada Elections Act and Referendum Act are conducted by the Commissioner of Canada Elections in an independent, impartial and fair manner

1,515

2,845

4,360

Internal Services

18,281

2,402

20,683

2. Expenditures for the Quarter ended September 30, 2015

During the second quarter of 2015-16, the ODPP spent $39,540 thousand compared to $35,676 thousand for the same period in 2014-15, as detailed in Appendix B. The increase of $3,864 thousand (or 11%), compared with expenditures in the same quarter in fiscal year 2014-15, is mainly due to an increase in the provision of prosecution services by Crown Agents and an increase in salary expenses due to the transfer of the Commissioner of Canada Elections to the ODPP.

Table 2. Expenditures by Strategic Outcomes and Internal Services for the Quarter ended September 30, 2015 (in thousands of dollars)

Strategic Outcome and Internal Services

Program Expenditures
(Vote 1)

Statutory Authorities

Total

Total Expenditures

34,389

5,151

39,540

Strategic Outcome 1 Criminal and regulatory offences under federal law are prosecuted in an independent, impartial and fair manner

29,850

3,457

33,307

Strategic Outcome 2 Compliance and enforcement activities under the Canada Elections Act and Referendum Act are conducted by the Commissioner of Canada Elections in an independent, impartial and fair manner

335

561

896

Internal Services

4,204

1,133

5,337

3. Year-to-date Authorities and Expenditures as at September 30, 2015

At the end of September 2015, the ODPP had spent $74,838 thousand (or 40%) of its total authorities of $187,371 thousand as detailed in Appendix B. At the same time last year, the ODPP had spent 44% of its total authorities.

D. Risks and Uncertainties

The ODPP’s key corporate risks are identified and assessed through an annual update of the Corporate Risk Profile. This year, a number of key risks could have financial impacts should they materialize. Strategies have been put in place to mitigate them.

Funding is the highest priority for action, and the contributing factors are:

Treasury Board has imposed an operating budget freeze requiring departments/agencies to cover salary increases from within budget. The ODPP is near the limit of what it can absorb within its current budget.

Recoveries from regulatory agencies have been lower than anticipated in 2015-16.

To minimize the risk, the ODPP has taken steps to control spending and staffing actions. It is also working closely with investigative agencies to anticipate and plan for resource-intensive actions by them.

E. Significant Changes in Relations to Operations, Personnel and Programs

No significant changes were noted during the second quarter of fiscal year 2015-16.

* Includes only Authorities available for use and granted by Parliament at quarter-end.

** Under the Statutory authorities, Electoral expenditures funds are part of the costs incurred by the Office of the Commissioner of Canada Elections (OCCE) to ensure compliance with, and enforcement of the Canada Elections Act. The OCCE’s functions were carried out under Elections Canada prior to October 1, 2014. Therefore, expenditures related to the OCCE’s activities are reported under Elections Canada for the previous quarters in 2014-15.